FWO finds high number of Caltex sites breaching laws

The Fair Work Ombudsman (FWO) has released a report detailing a workplace non-compliance rate of 76% in the Caltex service network.

Fair Work Ombudsman Natalie James said: “In light of this alarmingly high level of non-compliance across its retail fuel outlets, I am not surprised by Caltex’s announcement to the ASX last week that it will transition franchise sites to company operations”.

“FWO’s report shows Caltex Australia has been presiding over a non-compliant and unsustainable operating model,” Ms James said.

The FWO commenced its investigations in late 2016 after being made aware of a surge in noncompliance at various Caltex sites.

The report found that out of the 25 stores visited, just six of the sites were found to be compliant.

Issues found at other sites included; non-payments and underpayments, cash payments made ‘off the books’, false records, and threats of termination/visa cancellation.

C&I approached Catlex for a response the FWO’s findings.

A Caltex spokesperson said: “Caltex has consistently said we are committed to stamping out wage underpayment anywhere in our network and that is why our workplace audits are mandatory”.

“We have taken the actions we are permitted by the relevant Codes and under our agreements with franchisees,” the spokesperson said.

“In mid 2016 Caltex established an audit process, an independently run whistle-blower hotline, and an assistance fund for franchisee employees who have been affected by the conduct of certain of our franchisees.

“The Fair Work Ombudsman has an important role to play in ensuring compliance with Australian workplace laws, and has powers to take action where they find non-compliance with those laws.

“The FWO issued a report on the 25 Caltex franchise sites it audited around a year ago. Of these, 19 were found to be non-compliant but just two are facing further action from the FWO.

“These 25 sites that were investigated by the FWO are not a representation of the network of approximately 1900 Caltex owned or affiliated sites across Australia.

“Caltex is concerned about the comments made by the FWO, as our view is that the regulator and industry – and others – need to work constructively if we wish to eradicate wage underpayment. Caltex has a strong record of good engagement with other regulators and believes constructive engagement between industry and our regulators is important.

“The Caltex audit program is working and we are committed to continue. Wage underpayment is declining, underpaid workers from exited sites have access to our employee assistance fund and over 875 people have now come to work directly for Caltex.

“Since instances of wage underpayment in our franchise network first emerged in 2016, Caltex has been very clear – unlawful behaviour would not be tolerated and we will act decisively to remove the practice from our franchise network. This work continues.

“At this stage, since mid-2016, we have audited 292 sites and this will continue for the remainder of our network. The FWO’s investigations are different and cannot be compared with our own audit program which has completed 292 audits of Franchisee operated sites to date – about half the network.

“Caltex Employee Assistance Fund has proven to be an efficient and fair system to make a contribution to employees who have been underpaid by employers. Administered by a third party, the Fund will continue to operate in conjunction with the ongoing underpayment audits. The Fund commenced operation at the end of May 2017. Currently 163 sites are eligible and the Fund has so far received a total of 269 claims in relation to 84 of those sites. The average employee payment is around $25,800 and as at 23 February 2018 of the 269 claims received 155 are approved and 81 in progress. Only 21 have been rejected.”